Today I want to discuss an important topic that, if you aren’t careful, could derail the entire mortgage process.
I’m talking about when homebuyers make significant purchases (ex: appliances, major electronics, car) in the run-up to the real estate closing.
As a lender, I do a “soft pull” on the person’s credit before closing to see if there are any new inquiries or credit lines. If I notice something unusual, I require more documentation which can drag out the process.
What’s worse, new purchases before closing may impact the client’s debt-to-income ratio and/or credit score. That means the person who once qualified for the loan could be ineligible.
Remember: before the loan closes, homebuyers should to not make significant purchases. The home loan is the only “big” item they should focus on. Once they sign the closing documents and receive the house keys, then they can go to Best Buy and buy that big-screen TV they always wanted 🙂
Photo courtesy of Simon Nowak (Flickr)